There are many misconceptions out there about what real estate lawyers actually do and for many people, what happens behind the scenes in a real estate practice is a mystery.
Probably the two most frequently asked questions about real estate lawyers are:
Do you need a lawyer when buying a home; and do you need a lawyer to sell your house?
The answer to both of these questions is, yes. You need a lawyer to either buy or sell a property. However, a real estate lawyer can do so much more than just helping you to buy or sell a house. A real estate attorney deals with many types of legal issues that involve land, buildings, landlords, tenants, and property developers.
What is a Real Estate Lawyer?
The exact definition of a real estate lawyer is: A lawyer involved in all aspects of legal work related to real property including:
- Ownership; and
In Ontario, all lawyers are licensed through the Law Society of Ontario and they must keep their education current by completing twelve hours of continuing professional development annually.
When do you need a Real Estate Lawyer? What does a Real Estate Lawyer Do?
In addition to assisting with buy/sell property transactions, there are many other ways a real estate lawyer can provide value to both residential and commercial clients.
Here are just a few examples of situations where the advice of a real estate attorney can benefit you:
- Buying or selling a home or commercial property
- Leasing or renting a building or property
- Developing, rezoning, or severance of land
- Landlord-tenant legal issues and representation
- Land disputes with a neighbour or co-owner
- Dealing with a Family Cottage
- Transmission to an executor, beneficiary, or surviving spouse
- Independent legal advice related to matrimonial transactions
Are there different types of Real Estate Law?
Real estate law is divided into two major categories — residential real estate and commercial real estate.
Residential Real Estate vs. Commercial Real Estate
- Residential real estate
Residential real estate involves the sale and rental of land and houses to individuals.
- Commercial real estate
Commercial real estate transactions tend to be more complex. Transactions involving land development, leases, and the purchase and sale of commercial buildings usually fall into this category. Dealing with commercial transactions requires more experience, both on the part of the lawyer and their staff.
Many people try to cut costs by not involving a lawyer. However, as with most things, an ounce of prevention is worth a pound of cure. Having a lawyer conduct due diligence in the early stages of a transaction can uncover things like disputed ownership, environmental concerns, or financial encumbrances. Many experienced business people will not even make an offer or consider a purchase until their lawyer has done some homework for them.
Leases are another area where a real estate lawyer can be very helpful. Whether you are the landlord or the tenant, having a contract reviewed by your lawyer before signing can save you headaches in the long run. If you have questions about the legalese in a contract or aren’t clear on what it means, a meeting or phone call with your lawyer can help to alleviate concerns and put your mind at rest.
What is Involved in the Purchase or Sale of a Home
When you hear the term “real estate attorney”, the first person that comes to mind may be the lawyer that helped you buy or sell your house. You may also hear this type of transaction referred to as “conveyancing” which according to Black’s law dictionary means “the science and art of transferring titles to real estate from one person to another”. It may sound like a simple process when put this way, but there are many steps going on behind the scenes.
As the client, your main job is choosing a lawyer, connecting them with your real estate agent, answering requests for information, and showing up to sign documents.
On the lawyer’s end, you may be wondering — what is that real estate lawyer doing anyway? Even for a straightforward sale or purchase, a real estate attorney duties often include:
- handling the overall transaction
- Due diligence, reviewing title and contract
- Arranging for title insurance if required
- Protecting client’s interests (including dispute resolution)
- Facilitating the financial portion of the transaction (mortgage, deposit)
- Ensuring proper registration of title
- Making adjustments for insurance, taxes, and fees
- Corresponding with strata, real estate agents, insurance brokers, mortgage brokers, financial institutions, government agencies, and other third parties as required
- Obtaining signatures and info required by regulators
- Reporting to all stakeholders; and
- Answering any questions you may have!
As you can see, the definition of a conveyance given above really wasn’t that far off — There really is an art to a deal and real estate lawyers have these transactions down to a science.
Questions about Land Development, Rezoning, and Land Severances?
Property owners often wonder if they can develop, subdivide, or rezone their property. For the average person, it is difficult to even know where to start. Consulting with a real estate lawyer is a good first step.
A real estate lawyer has easy access to information it may be more difficult for you to obtain, and more importantly, the background to translate what it means. Your lawyer also may be able to explain the process, costs, and other factors, so you can make an educated decision on whether to proceed.
In all instances, the real estate lawyer’s aim is to complete the task the client has retained them to do as smoothly as possible. They use their special knowledge of local property laws to simplify all kinds of real estate transactions. In addition to assisting with purchase and sale transactions, they can also be a valuable resource in guiding you through complex regulations to achieve your real estate related goals.